If we were to compare the developments in UK pensions in 2010 to a football match, it might be described as a classic game of two halves – with the half time whistle being blown a little early in May for the General Election.

Unlike most football games, there was a new coalition referee for the second-half who decided that some of the goals in the first half were under review. If fans were feeling a little cheated at this point, they soon got over it as the second half began with a flurry of events, announcements, consultations, surveys, opinions, discussions, guidance, strikes and so on – I even recall someone saying at a meeting in June that they were unable to offer an opinion on the market because they had been on holiday for a week.

With so much having happened in 2010, and as we begin the countdown to Christmas and the New Year, we thought it might be useful to look back, sort the fact from the fiction and offer a post match summary of what actually happened.

Please let us know if we have missed anything out, what’s affected you most or what is likely to go down as the big story of 2010 in years to come – there’s plenty to choose from.

A new Government
In the first four months of the year, under Gordon Brown’s leadership, the DWP published regulations for Automatic Enrolment and National Employment Savings Trust (NEST) and confirmed that the option to contract out of the additional State Pension into a Defined Contribution pension scheme would be abolished from 6 April 2012.

But did it all matter when, after 6 days of uncomfortable behind-the-scenes negotiations, the Labour Government was replaced by the newly formed Conservative and Lib Deb Coalition on 12th May.

With the new government came a new lineup under David Cameron: George Osborne as the Chancellor of the Exchequer, Iain Duncan Smith as Secretary of State for Work & Pensions and Steve Webb as Minister for Pensions.

Some strong statements and intentions followed soon afterwards. IDS was first up with his vision for improving the quality of life by phasing out the default retirement age, ending compulsory annuitisation at age 75 and, from April 2011, the Basic State Pension was to rise by the minimum of prices, earnings or 2.5%, whichever is higher. He also committed to making automatic enrolment and increased pension saving a reality.

Next it was George Osborne with the first Budget of the Coalition Government on 22nd June, which included a number of announcements on pensions:

• Pensions Indexation. From April 2011, the Consumer Prices Index (CPI) will be used for the indexation of all benefits, tax credits and public service pensions.
• State Pensions and Benefits. From April 2011, the basic State Pension will be uprated by the higher of earnings, prices or 2.5 per cent. CPI will be used as the measure of prices but the basic State Pension will be uprated by the equivalent of RPI in April 2011.
• State Pension Age. The Government will review the date at which the State Pension Age rises to 66.
• Pensions Tax Relief. The Government will restrict pensions tax relief through an approach involving reform of existing allowances, principally of a significantly reduced annual allowance in the range of £30,000 to £45,000.
• Public Service Pensions. An independent commission chaired by John Hutton, formerly Secretary of State for Work and Pensions, will undertake a fundamental structural review of public service pension provision by Budget 2011.
• Default Retirement Age. The Government will consult shortly on how it will quickly phase out the Default Retirement Age from April 2011.

Two days later, reviews were announced into the timing of the State Pension Age rise to 66 and how best to implement auto-enrolment.

We all caught our breath for a few months and then, in October, the Government announced that, from April 2011, the annual allowance for tax privileged pension saving will be £50,000 and from April 2012 the lifetime allowance will be £1.5million.

Soon after, the outcome of the independent review into auto-enrolment was published and, separately, the Government announced that the State Pension age would rise from 65 to 66 between December 2018 and April 2020 for both men and women.

The Pensions Regulator flexes its muscles
Bill Galvin became the new chief executive of tPR from 17 May, replacing Tony Hobman, after five years in charge.

Soon after, guidance was issued on record keeping, monitoring employer support, multi-employer schemes and winding-up. Consultations were launched on transfer incentives and single equality schemes.

From June to September tPR used its powers of enforcement, handing out the first Contribution Notice to the Bonas Group Pension Scheme and a Financial Support Direction to companies connected with the Nortel Group and Lehman Brothers Group.

After four years of operating the Trustee Register, tPR changed the way it assesses the conditions for registration. From 51 firms at the start of the year, it is expected that this number will be considerably less by the year-end.

and the PPF was busy too
January and November saw the PPF unveil not one but two Purple books as a revamp took place and those schemes currently in the assessment period were removed.

June was the month the PPF issued new guidance to actuaries completing section 143 valuations and in October a new formula was proposed for calculating the pension protection levy from 2012/13 onwards.

Finally, as the year approached its end, the first scheme (the Paterson Printing Pension Scheme) successfully transferred through the new Assess & Pay Programme, just under 18 months after the company went insolvent.

How 2010 is shaping up – end of year financials
As we write, the pound is up 4.5% in the year against the Euro and down 3.5% against the dollar, the FTSE 100 sits around the 5750 mark, up 6% on the year, and the benchmark government bond yield has hardly moved compared to a year ago. Wouldn’t it be great if these relatively moderate movements were the result of a number of small predictable steps in one direction throughout the year and we knew what was going to happen next year? If only it was that easy when we agreed our recovery plans.

No doubt many of us will end the year by looking to the future. Will 2011 be the year that EU regulation imposes further funding requirements on defined benefit schemes? How will the rpi/cpi debate play out? Will new rules allow early access to 25% of our pensions savings if we fall ill? How about an ETV mis-selling scandal? Like 2010, a lot could happen. Please let us know what your predictions and concerns might be.

But before you become too paralysed with fear about potential hyper-inflation, the break-up of the European Union, winning the Ashes or never hosting the World Cup, you may wish to consider the words of Mark Twain: “I’ve been through some terrible things in my life, some of which actually happened”.

With Seasonal Best Wishes,
Brian Spence and the team at Dalriada Trustees

In this challenging economic environment, we tend to be increasingly concerned by commentators’ views on the potential impact of inflation. Will we see a return to the hyperinflation of the 70’s or do we face a period of deflation?

Given the impact that both upward and downward movements can potentially have on our overall economic health and our personal wealth, it is hardly surprising that we are taking a keener interest than ever.

Most of the expert commentators seem to consider only two possible outcomes of high inflation or deflation. Is it just me or is there a distinctive lack of middle ground views being expressed in this important issue?

According to the Bank of England, the remit of the ‘wise men’ on the Monetary Policy Committee (MPC) in setting interest rates is to achieve an annual inflation target of two per cent, based on the Consumer Prices Index (CPI). Further, it is clearly stated that they are not attempting to beat the target as they consider inflation below the target to be just as bad as inflation above the target.

So given that this target is symmetrical, why are the commentators so polarised in their views of where we will end up with inflation? Could they be tactfully suggesting that the Bank of England isn’t going to do its job properly and, with opinion split so evenly, are they perhaps implying that it’s a near impossible job?

Also, where does this wide disparity in inflation predictions leave the rest of us who are looking for some kind of clarity on the issue so we can make informed decisions about the likely effect this will have on our personal finances, our businesses and our pension schemes? And should we accept that the impact will be, as the commentators seem to suggest, one extreme or the other?

Looking at some of the pronouncements made by the Bank of England, I have my own thoughts on this issue:

1) According to the Bank, “low inflation can help to foster sustainable long-term economic growth”. I note that they talk of ‘low’ inflation, not zero inflation. We should therefore accept that a small rise in inflation is considered ideal in securing economic growth.

2) The Governor of the Bank of England, Mervyn King, admits that inflation will be above target throughout 2011 and that bank rates will not rise soon. The Bank also states that the maximum impact of a change in interest rates on consumer price inflation takes up to about two years to come into effect. The current historically low bank rate of 0.5% has been in place since March 2009 and there are no signs of it being increased. Surely this will only add to inflationary pressure in the coming months and the effects will continue to be felt for some time beyond 2011.

3) In March 2009 the MPC announced its decision to inject money directly into the economy through quantitative easing. Last month, in the US, the Fed announced a further $600bn of QE, leading to accusations of exporting inflation abroad. In Europe, various options are being considered in an attempt to prevent contagion in EU financial markets. While no one quite yet knows what the impact of these actions will be, like the setting of interest rates, one might expect a lag effect on inflation and on the upside.

4) Final thought – which is the least worst option between high inflation and deflation? Whilst neither are welcome, unfortunately, whether we know it or not, our personal and national debt levels are so high in the UK that the pricing effect of deflation would be catastrophic, not to mention the likely recession and unemployment that would likely follow.

I therefore believe that the wise men at the MPC will continue to aim at their symmetrically-balanced inflation target but with a bias to the upside – although I don’t expect them to acknowledge it – and ultimately I think that their tinkering will lead to a significant overshoot on the inflation target.

To finish, here’s my ‘get out of jail free’ card, courtesy of Mervyn King: “Cycles in real activity sometimes reflect behaviour outside the influence of monetary policy.”

Perhaps his words underline why the commentators are right to rule out a middle ground destination for inflation as the MPC’s job is just too hard, the financial world is entering unknown territory and the only outcome we can rule out is the one that comes near to the inflation target.

A man walks into a betting shop

He places a £10 stake on a 7-horse accumulator. To win the bet, all 7 horses need to win their races. One by one, they keep winning and after 6 races the accumulator stands at £800,000.

There’s just one to go and the odds are 4-1. He’s now sitting at home in front of the TV, a bag of nerves, knowing that within half an hour he will be collecting a cool £4m or nothing at all.

Back at the betting shop, the manager has filed the bet in the no-hopers pile and is blissfully unaware of what’s going on.

Half an hour later and, would you believe it, the horse has won but there’s a twist – the maximum permitted payout is only £1m. After much discussion and a failed legal challenge, the man is richer by one million but feels like he has lost three (not to mention the legal fees). In effect, he had placed a final bet that only had a 20% chance of paying out £200,000 but had an 80% chance of costing him £800,000.

While he lay on the beach the following week sipping his favourite cocktail, he reflected on two things he had learnt:

1) Check the rules – if the limit is £1m, only do accumulators to that amount.
2) Know your position – before the last race, he could have laid the bet off, whether there was a limit or not.

A trustee walks into a trustee meeting

The chairman points out that the scheme has been running for exactly 60 years today and the recovery plan has just 10 more years to run.

When the valuation was last done in 2008, the funding level on an ongoing basis was 80% with a deficit of £2m. The scheme is invested in equities and closed to accrual so if the recovery plan is to be believed and  the employer keeps making the contributions then, provided that equities achieve 7%pa, the trustees can begin to consider securing the members’ benefits with a Life Company in 2020.

The trustees agree to meet again in 6 months. As they settle in to their respective day jobs, they’re not a bag of nerves.

Back at the stock exchange, equities have been all over the place and currently stand 40% higher than at the date of the last valuation. Over at the Pensions Regulator, guidance and rulings have been coming thick and fast.

Ten years later and, would you believe it…..actually this time I’ll leave the outcome blank for you to decide. There are just too many moving parts and, let’s be honest, anything is possible these days, especially over a 10 year period.

While he lay on the beach, ten years and a week later, the trustee reflected on two things he had learnt:

1) Keep checking the rules and regulations – they’re complex and they keep changing.
2) Know your position – if only he and his fellow trustees had monitored things more closely, they’d have spotted opportunities and made different decisions along the way.

Did you spot the difference?

That’s right, the man in the betting shop is only responsible and personally liable for his own money. Let’s hope it all turns out OK for the trustee.

From 6 April 2006 (A Day) pension schemes were allowed 5 years to update their Scheme Rules to incorporate the new tax regime.　Whilst most trustees took advice and action in 2006 and incorporated the new tax regime in their Rules, there are some schemes which did not.

If Trustees do not address this issue now and certainly before 5 April 2011, there could be unintended consequences of not taking action. The Scheme could, after 5 April 2011, end up providing higher benefits than intended as any Earnings Cap in place which currently restricts scheme benefits will fall away. There may also be provisions in the Scheme Rules which will affect the Scheme’s approved status post 5 April 2011.

One of the Pensions Regulator’s key indicators of good governance is a requirement for Trustees to review and update their Scheme Rules on a regular basis.

Time is now of the essence since there is less than 6 months to review the Scheme Rules, before it is too late!

Trustees will also need to consider preserving the power to pay any scheme surplus to the employer (Section 251 of the Pensions Act 2004). This was, until very recently, required to be addressed by 6 April 2011 at the latest but a last minute amendment to the requirement has meant that the deadline date has now put back to 6 April 2016. Not the same rush required but still needs to be dealt with.

When the UK Treasury announced the new rules on Restricting pensions tax relief through existing allowances on 14th October, my reaction was and remains very much the same as my colleague, Brian Spence, who was quick to welcome the straightforward, simple and well thought out policy announcements.

With the benefit of a weekend to reflect and with my defined benefit trustee hat firmly on, here are some further specific and general thoughts, including quotes directly from the HMRC’s summary of decisions.

“A.1: From April 2011, the annual allowance (AA) for tax-privileged pension saving will be £50,000 (reduced from £255,000 in 2010-11)”;

In general, contributions above £50,000 in a single year only occur if you are a high earner paying tax at the highest marginal rate on all of the contribution, you have a sudden wind-fall (such as redundancy) or you are approaching retirement and are able to afford and benefit from such high contributions.

Unfortunately, for most people, contributions of this size never seem to happen – or do they? I think they do.

“A.22: From April 2012, the lifetime allowance (LTA) for tax-privileged pension saving will be £1.5m (reduced from £1.8m in 2010-11)”;

Again, figures such as £1.8m and £1.5m are out of the reach of most people in today’s money.

Comparing the new LTA with the AA, a ratio of 30 (£1.5m / £50,000) seems fairer than the previous ratio of around 7 which allowed (and encouraged?) people to defer pension saving and then, for the lucky few, contribute very large tax-efficient amounts over a short number of years pre-retirement.

“A.2: There is no proposal to index the level of the AA during the forecast period. Beyond that, the Government will consider options for indexing the level of the AA”;

The AA is to be flat for 5 years and then indexation is to be considered. Interestingly, there doesn’t appear to be any mention of indexation of the level of the LTA. Assuming inflation of 2.5% over 5 years, the AA will be around £44,000 in today’s prices and the LTA around £1.33m – still high figures but creeping ever closer in just 5 years.

“A.5: Deemed contributions to DB schemes will be calculated via a flat factor…set at 16,..meaning that an increase in annual pension benefit of £1,000 would be deemed to be worth £16,000;
A.7: The previous year’s accrued pension benefits will be revalued for active members”;

The combination of a lower AA and higher AA factor (increased from 10 to 16) could lead to active members of DB schemes facing a tax bill when they enjoy a pay rise of under £10,000 and, in some cases, under £5,000. Let’s consider two examples:

For an active member with 24 years in his 1/60 ths DB scheme, a pay rise from £60k to £66k in his 25th year and CPI assumed at 2.5%, the deemed contribution would be £46,400, which is just below the £50,000 AA. Whilst such a pay rise might be rare these days, it can happen.

A member with 35 years accrual,  a £100,000 salary and the same percentage increase would find themselves at nearly twice the AA and facing a significant tax charge.

“A.14: Where individuals exceed the AA in a given year, unused allowance from up to three previous years will be available to offset against the excess pensions savings”;

“A.19: Where individuals have (deemed) contributions over the AA in a pension arrangement, the scheme must provide the member with their pension input amount for the relevant year within six months of the end of the tax year. Where individuals request this information, pension schemes must provide details on the pension input amount by the later of 3 months from the request and 6 months from the end of the tax year”;

“A.20: Employers must provide information about employees’ pensionable pay, benefits and service to pension schemes by 6th July following the end of the tax year”;

Those responsible for monitoring pension input amounts will find themselves quite busy, not to mention the many other parties that will be required to do the calculations and give advice to members.

“A.23: The Government is minded to maintain the LTA valuation factor at its current level of 20″;

I’m not sure that I fully understand why the AA factor of 16 is set differently to the LTA factor of 20. The 16 factor allows you to accrue DB pension of £3,125 pa (£50,000/16) and the 20 factor limits the ultimate pension to £75,000 (£1.5m/20), meaning that you could theoretically get there from scratch in 24 years (£75,000/£3,125)  if you put the maximum tax-relieved amount in each year.

“A.24: The LTA tax charges will remain unchanged (55 per cent if paid as a lump sum and 25 per cent if paid from annual pension income, on top of marginal rate tax on the pension income)”;

In other words, don’t go over the limits.

Finally, two positive snippets to finish….

“A.25: The maximum tax-free lump sum will remain at 25 per cent of the standard LTA;
A.6: Deferred members will be exempt from the AA regime”;

In conclusion

The government is still offering tax relief on contributions at the highest marginal rate and the ability to take a 25 percent tax-free lump sum on retirement. This is good news.

The lower LTA, significantly lower AA and higher AA factor will prevent the wealthy from benefitting as much from pensions tax relief as they have done in the past.

Unlike before, going forward, the ONLY way to acquire a sizeable pension pot is to start saving early and to save consistently.

Pensions may be inflexible but how many times have you saved into a PEP or ISA then taken the money out two years later to spend it on something that seemed essential at the time? Even worse, how many people have an offset mortgage which enables them to pay down more quickly but the opposite occurs?

Pensions are too important and, for me, it is right for government to create a framework that steers our choices towards saving for retirement.

I’m in favour of choice architects this time.

PS. The apparent ease at which active members of DB schemes are deemed to reach the new annual contribution limit is an unfortunate example of why so few active DB members still exist.

I just noticed today the newly launched Association of Member Nominated Trustees http://amnt.eventbrite.com/ is a not-for-profit organisation that supports member-nominated trustees, member-nominated directors and employee representatives of UK based pension schemes in the private and public sector.

Anything that improves the collective skills and knowledge of occupational pension scheme trustees is a good thing BUT why the introduction of pension trustee apartheid?

Trustees are trustees and the term “member nominated trustee” is a distinctive legislative term that refers to trustees elected by pension scheme members. Once elected though the member nominated trustees and employer nominated trustees including any professional trustee are all in the same boat.  At an operational level their rights, duties and responsibilities are identical.

I wonder in determining who has a right to join this organisation have the founders really thought it through.

• in some schemes an employer nominated trustee (for example a company director) has offered themselves up for election as a member nominated trustee where nobody else was prepared for come forward to be appointed as a trustee to avoid the inconvenience of approaching the membership again and again to stand as trustees

• in other schemes independently minded employer nominated trustees (or even professional trustees) have put themselves forward as member nominated trustees to entrench their position as trustees so that they cannot be easily removed by an employer who objected to their views or actions
  
  
• in a third category of schemes there are “employer nominated trustees” who have been chosen by the employer specifically to represent some constituency of members.  Such trustees are not member nominated trustees but on many boards of trustees the difference between such an individual and a true member nominated trustee is not even clearly understood

In other words the distinction between “member nominated” trustees and other trustees is not as straightforward as it appears to be at first glance.  In addition it promulgates the myth that member nominated trustees in some way have a different responsibility from other trustees.  The them and us mentality around the trustee board is thankfully something that has largely faded over the last decade and it is retrograde to insert such a distinction now where none exists in practice for many schemes.

However laudable the aims of this new organisation I hope they see sense and allow any trustee to join their association who wishes to.

Brian Spence is a founder of actuaries Spence & Partners Limited and a director of independent trustee Dalriada Trustees Limited.  You can follow him at @briandspence or@PensionsEndgame on Twitter or link to him on LinkedIn.

I am not sure that I agree that pensions should attract tax relief at all – why force people into relatively inflexible long term savings that they cannot get at if their health or financial wellbeing takes a turn for the worse mid-career?  Why bias the financial system towards one type of savings structure to the disadvantage of others?

However lets face it without tax relief we would have no private pensions system in the UK worth talking about.

Given that we have tax relief it must make sense to limit the amount of relief any individual can receive.

The proposals put forward by the previous UK government were ludicrously complicated building on top of the shambolic “pensions simplification” introduced from 2006.

Well the new rules announced today by the UK Treasury are very sensible.   £50,000 a year for the new Annual Allowance seems like a reasonable figure.  Owners of small businesses and others with highly variable earnings will be able to claim unused relief for previous years which will allow them to make meaningful contributions when the opportunity arises.

The vast majority of those in final salary pension schemes will suffer no effect at all – only those with large pensions and/or significant salary increases will be caught.  A few commentators have trotted out the old another nail in the coffin remarks about final salary schemes (a bad day for final salary schemes today it would appear since the NAPF’s closure of its final salary scheme is a further nail in the coffin according to Money Marketing, or maybe it is a bad day for journalism!)

My independent trustee colleague Andrew Mitchell recently wrote an article about the mess the current government made to its first change to pensions policy in replacing RPI with CPI for pensions indexation.

Whilst the Daily Mail predictably refers to the change as “the big squeeze” this, the government’s second major pensions policy announcement, is straightforward, simple and well thought out – congratulations on getting this one right!  We may well wait quite  while though before we see an increase in the £50,000 Annual Allowance or in the new Lifetime Allowance of £1.5 million!

UPDATE – For a more detailed analysis of the tax changes to UK pensions see this subsequent article by my colleague Ian Morrice.

Brian Spence is a founder of actuaries Spence & Partners Limited and a director of independent trustee Dalriada Trustees Limited. You can follow him at @briandspence or@PensionsEndgame on Twitter or link to him on LinkedIn.

From the perspective of the professional trustee, engaging in public debate on pensions might seem a secondary consideration, but not so when issues of pension scheme governance and the protection of members’ interests abound.

One such debate is that flowing from the Government’s statement in July about using the consumer prices index (CPI) instead of the retail prices index (RPI) as the basis of future revaluation orders – as the basis, in other words, of revaluing deferred pensions and pensions in payment.

At one level, it came across (and was probably intended) as a technical adjustment to align with changes previously announced for public sector pensions.  However, initial reaction was vocal and immediate:  it looked, as one commentator said at the time, as if it had been “snuck through the back door” and a newspaper columnist declared it to be “a shabby, retrospective reform” – retrospective because it was, and is, likely to reduce the future value of pensions by 20% or more for some individuals, and this is clearly to the detriment of pension scheme members.  KPMG estimated that business would be better off to the tune of £100bn, a measure of the reduction in value of pension liabilities.

CPI, which was introduced in 1996, has generally tracked below RPI by around 0.8%.  Most recent figures for September (which will be used to adjust public sector pensions and other benefits from April 2011) in fact showed a gap of 1.5%, with CPI at 3.1% and RPI at 4.6%.  However, the concern for private sector pensions is not just the adoption of one measure of inflation for another, but the climate of uncertainty it creates – for actuaries and trustees, for bond markets and annuity purchase contracts, for scheme administration and for trustees’ communication with pension scheme members.

Why? – because, unlike the public sector, private sector provision is dependent on the provisions of scheme-specific trust deeds, and here the devil is in the detail.  And so, the question may be asked, will a modification power be given to scheme sponsors and trustees (where it is otherwise mutually agreed) to approve the switch to CPI;  and, conversely, what safeguards will there be to prevent undue pressure being put on pension scheme trustees?  Moreover, if it is decided to adhere to RPI (and, in many cases, this will be because RPI is the measure of price inflation recognised in scheme rules), could it be that future revaluation will have to be by reference to RPI or CPI if higher?

Government is currently considering this issue, and it is likely to lead to publication later in the autumn of a consultation paper.

Andrew Mitchell is an independent trustee representative of independent trustee Dalriada Trustees Limited.  You can link to him on LinkedIn.  Dalriada provides professional trustee services to pension schemes in all parts of the UK and Ireland.

In this article in a short series about choosing an independent trustee I will look at the skills and experience required to act as a professional pension scheme trustee.

First and foremost professional trusteeship is a generalist role.

To hold his or herself out as a professional a trustee should be able to demonstrate skills and experience in the majority of the following areas:

• Investment and Economics
• Pensions Law
• IT and Information Security
• Pensions Administration Practice
• Accounting and Corporate Finance
• Governance and Chairing Skills
• Actuarial Science

For some appointments where the continued support of the sponsoring employer may not be strong enough to rely on in future a good understanding of insolvency law is required together with practical experience of the Pensions Protection Fund and its requirements and ideally substantial experience of similar situations.

It is obvious but still worth stating that no single individual can be on top of everything in this list, however a working knowledge of everything is required.  A lifetime of working as a pensions manager for a large secure company or as a pension scheme actuary will not equip an individual for the role unless the experience has been wider.  I have heard professional trustees who have been happy to state that they do not understand corporate finance and always rely on advice from a specialist.  Shame on them!  As a trustee you do not need to be an expert in every discipline (that would be impossible) but you cannot do an adequate job without being able to challenge professional advice and direct the relevant advisers.

A good option is to choose an independent trustee firm rather than an individual trustee where the combined skills of several individuals complement each other.

An employer should ensure that they have a good understanding of the level of knowledge that a trustee has and a good idea of how that knowledge was acquired.  Is it theoretical knowledge obtained through study and qualifications or has practical experience been obtained?

How broad and deep are the individual’s connections in the pensions industry –are they up to date and if so how do they stay up to date?

What are the individual’s softer skills like?  How will they gel with other trustees and the employer’s personnel.

Interviewing the prospective candidate is essential.  Ideally at some length.  This individual or firm could be the most important hire than an employer makes!

Brian Spence is a founder of actuaries Spence & Partners Limited and a director of independent trustee Dalriada Trustees Limited.  You can follow him at @briandspence or @PensionsEndgame on Twitter or link to him on LinkedIn.  Dalriada provides professional trustee services and Spence & Partners can provide support to employers in appointing an independent trustee.  Brian has written a series of articles on appointing an independent trustee.

Follow @SpencePartners and @DalriadaTrustee on Twitter.

Employers faced with choosing an independent trustee have quite a difficult job.  There is no recognised qualification for independent trustees or any self-governing profession.

Firms offering independent trustee services are disparate in nature and include:

• individuals
• offshoots of legal firms – some of these employ only lawyers, other have become much more broadly based businesses
  
  
• “franchised” businesses – often employing trustee representatives on a part-time basis because they are semi-retired or following a portfolio career
• specialist trustee firms – tending to come from a financial background with actuarial and administration skills to the fore